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The Senate Finance Committee wrapped up its debate over health care reform early in the morning on Oct. 2, with a final vote set for the week of Oct. 5, after lawmakers receive a final scoring of the bill by the Congressional Budget Office. Democrats managed to fend off several Republican amendments aimed at removing provisions they argued would raise taxes on middle income families and were contrary to President Obama's promise not to raise taxes on the middle class defined as family incomes under $250,000.

Senate Finance Committee Chairman Max Baucus, D-Mont., referred to the proposals as "message" amendments which would "gut the bill," and encouraged members to vote in the negative. The amendments were eventually defeated but several Democrats sided with Republicans making the votes much closer than anticipated. The panel, however, approved by voice vote an amendment offered by Sen. Olympia Snowe (R-Maine) that would exclude HIPPA-excepted insurance benefits, such as indemnity plans, from the excise tax on high cost plans. Additional provisions provided tax credits for small businesses with seasonal employees and reimbursement for federally qualified health centers.

No public option, yet

The Committee on Sept. 29 rejected two amendments that would have provided a public option health insurance plan, but lawmakers backing the proposals said they plan to offer them again when the full Senate takes up health care reform. The first amendment offered by Sen. John D. Rockefeller (D-W.Va.), fell by a vote of 8 to 15. A major sticking point for moderate Democrats as well as Republicans was the requirement that medical providers who participated in the public option would have to accept Medicare rates for at least two years. Rockefeller, however, did find support among eight fellow Democrats for his plan and insisted that support for a government run health plan was gaining momentum. He said he will offer his amendment when the health reform bill is debated on the Senate floor.

Baucus said that as much as he agreed with the intent of Rockefeller's proposal, "to hold the insurance companies feet to the fire," he was obliged to produce a bill that would receive a super majority in the Senate. "I can count and no one has shown me how a public option could win 60 votes in the Senate," said Baucus. "I fear if this provision is in this bill as it goes out of this committee, it will jeopardize real meaningful health reform." Grassley argued that Rockefeller's amendment was "a slow walk to government run, single payer system," that would eventually put private insurance companies out of business.

The second public option amendment was offered by Sen. Charles E, Schumer (D-N.Y.), and was defeated by a 10 to 13 margin. Schumer's proposal was considered more of a compromise alternative as it allowed medical providers the right to negotiate their own prices and did not require them to participate in the public option. Schumer also plans to offer his amendment on the Senate floor.

Following the committee vote rejecting the public option amendments, White House spokesman Reid Cherlinsaid the president is "open to other constructive ideas." Obama will work with Congress to ensure that those who cannot find affordable health insurance "will always have a choice," Cherlin said.

As the Committee moves towards completion of the mark-up, Senate Majority Leader Harry Reid (D-Nev.) made preparations to possibly take the bill to the floor by canceling a planned week-long Columbus Day recess slated to begin on Oct. 12. "I apologize to everyone for not being able to have that whole week off, but I think with health care, which is really beginning to ferment, it wouldn't be right for us to be gone that week," announced Reid from the Senate chamber. The Finance bill still has to merged with a bill already approved by the Senate Health, Education, Labor and Pensions (HELP) Committee bill. Two big hurdles in this process that the Senate has to resolve—the HELP bill provides for a public options and it would cost more over 10 years than the Finance Committee bill.

House bill

House Democratic leaders said on September 29 that they are not working towards a deadline to complete a health care reform legislative package. In remarks to reporters, House Speaker Nancy Pelosi (D-Calif.) and House Majority Leader Steny Hoyer (D-Md.) said the Democratic caucus is holding ongoing meetings each day in order to bring a legislative package before the House for a vote during this session of the 111th Congress. Moreover, Pelosi said Democrats are approximately 90 percent in agreement as to the contents of the reform bill.

"We don't feel any pressure of time," Pelosi said. "We are on a time line that will produce a bill in a timely fashion, but we feel no rush to come to the floor until we are ready." Hoyer said that although the bill will not go into effect until 2013, Democrats still want to move as swiftly as possible. At an earlier press conference, Hoyer indicated that the bill might be ready for floor consideration sometime in October.

Hoyer said that Democrats in the House are largely comfortable with a public option in the health care bill, but they have not yet reached a decision on how it will be configured. Pelosi said she believes the final house bill, which will combine the efforts of the House Ways and Means, Energy and Commerce, and Education and Labor Committees, will include a public option.

White House reform bill?

Discounting reports that the White House is drafting a health care reform bill, an administration source said that no decision has been made whether to introduce a stand-alone proposal. However, White House Press Secretary Robert Gibbs, at a press briefing on September 30, noted that the administration has been reviewing legislative language for various proposals. "We have been asked to look at and work with different committees on different pieces of legislation and aspects of them," Gibbs said. "But nothing has changed about us drafting or introducing a bill."

A Tennessee federal court has denied the request of the state Medicaid agency to set aside a 1998 consent decree requiring changes to its implementation of the early and periodic screening, diagnosis and treatment (EPSDT) program. The court rejected the agency's argument that the requirements of the decree exceeded those of federal Medicaid law.

Multiple challenges

Although Tennessee entered into the consent decree immediately after this class action was filed in 1998, the parties have returned to court many times in a continuing dispute over the extent of the state's obligations. In 2001, the district court ruled that the state had failed to comply both with the consent decree and the basic requirements of the EPSDT program but declined to hold the state agency officials in contempt because they had made serious efforts to comply (see ¶300,975). The court also appointed a special master to work out a compliance plan through mediation with the parties.

In 2004, the court found that the state officials had not complied with either the 2001 order or a subsequent injunction directing them to develop a plan to come into compliance (see ¶301,528). Finding that the agency did not have data necessary to measure its compliance, and that the agency would not comply with the orders within a reasonable time, it imposed a detailed schedule.

In 2007, the parties returned to court over a dispute over discovery of information the state should submit to establish the status of its compliance efforts, taking that issue to the Court of Appeals (see ¶302,216

and ¶302,450).

The motion to vacate

The state officials argued that the consent decree should be set aside because subsequent rulings by the Sixth Circuit Court of Appeals had changed the law so that legal principles on which the consent decree was based no longer applied. In Westside Mothers v. Olszewski, the court ruled that the "prompt provision of medical assistance" requirement of Soc. Sec. Act §1902(a)(8) did not require Medicaid programs to provide actual medical services. A later ruling in Brown v. Tennessee Department of Finance (see ¶302,769) directed the district court to modify a consent decree that required the Medicaid program to provide services in intermediate care facilities with reasonable promptness. In that case the Court of Appeals ruled that the court must consider the purpose of the settlement and the violations that were to be remedied when asked to vacate a consent decree.

The court found that the EPSDT provisions impose specific requirements that the Medicaid agency must: (1) inform eligible individuals of the availability and benefits of early and periodic screening, diagnosis and treatment (EPSDT) services, (2) provide or arrange for screening services, and (3) arrange for any corrective treatment for conditions found in the screenings. In addition, Soc. Sec. Act §1905(r) specifies the services required. The court ruled that this language reflects Congress' intention to benefit children under age 21 and to obligate the agency to provide the described services; therefore, the EPSDT requirements reflected in the consent decree continue to be enforceable in a civil rights action.

Almost 4 percent (580) of approximately 16,000 nursing homes in the United States could be considered the most poorly performing, according to a Government Accountability Office (GAO) report. The most poorly performing nursing, homes averaged over 46 percent more serious deficiencies that caused harm to residents and over 19 percent more deficiencies that placed residents at risk of death or serious injury, GAO said.

GAO found that the most poorly performing homes are distributed unevenly across the states, with eight states having no nursing homes in the most poorly performing category, while ten states had from 21 to 52 nursing homes identified as most poorly performing. To determine the characteristics of the most poorly performing nursing homes, GAO examined CMS data from 2008 on (1) deficiencies, revisits and other information that describe nursing home characteristics; (2) case-mix-adjusted nurse staffing hours; and (3) enforcement actions. In addition, GAO analyzed other CMS data, reviewed prior reports, interviewed experts in long-term care research, CMS officials, and 14 state survey agencies and reviewed some states' approaches to rating nursing home quality.

Comparison to CMS' SFF program

GAO found that the 580 nursing homes that it had identified overlapped somewhat with nursing homes identified by CMS' Special Focus Facility (SFF) Program, which identifies the 15 worst homes in each state and an additional 136 homes selected by states as SFFs. The SFF methodology creates a total score for each nursing home over three cycles by assigning points to deficiencies cited during the three most recent standard surveys, deficiencies curing the last three years of complaint investigations, and the number of revisits surveyors made to ensure that the nursing home had corrected the deficiencies cited on the three most recent surveys. GAO compared the SFF methodology to other compliance-based measures of poor performance and tested the sensitivity of the methodology to variations to determine the adequacy of the SFF methodology and concluded that the SFF methodology is reasonable and comprehensive. To estimate the number of most poorly performing nursing homes, however, GAO used the SFF methodology on a nationwide basis using statistical scoring thresholds but adopted three refinements to identify nursing homes that might have been missed using only the SFF methodology.

GAO recommended that the CMS administrator consider a nursing home's relative performance nationally when allocating SFFs across states and take actions to refine the SFF methodology to improve the identification of SFFs.

The Hawaii Supreme Court has been asked to decide a major issue in the challenge by a class of special needs Medicaid beneficiaries to mandatory managed care. The class contends that the expansion of the state's Quest waiver violates federal Medicaid law that protects children with special needs and other disabled beneficiaries subject to mandatory managed care; specifically, insurance companies participating in Medicaid managed care must have adequate capitalization and protection against insolvency, as well as a sufficient number and amount of providers under contract capable of addressing the special medical needs of Medicaid recipients.

Earlier rulings upheld the rights of the class to challenge the HHS approval of the waiver of the statutory requirements that were not met (see ¶302,881) and denied a temporary restraining order (¶303,113) as unnecessary; the contractors had agreed not to limit the beneficiaries to network providers while the litigation was pending.

They also argue that the two contractors that the agency hired to implement the program do not qualify as licensed health maintenance organizations (HMOs) under state law, so that they cannot require the beneficiaries to obtain services solely through the network. Federal law requires that Medicaid managed care organizations be licensed HMOs under state law. The two contractors are certified as accident and health insurers, but not under the laws specifically relating to HMOs.

The licensing issue is one of state law and has not been decided by the courts of Hawaii, and it could determine the outcome of the case. Therefore, the parties have asked the court to certify the question to the Hawaii Supreme Court. Litigation on the remaining issues will continue in federal court, but the licensing question will be deferred until the state supreme court has ruled.

GAO reports sustained access to Medicare services